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Thu 23rd Nov 2023 - Nightcap – ‘business not in a position to reach full potential until industrial action settled’ |
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Nightcap reports like-for-likes down 16.7% as rail strikes impact sales, ‘business not in a position to reach full potential until industrial action settled’: Nightcap – owner of the Cocktail Club, the Adventure Bar Group, Dirty Martini and the Barrio Familia group of bars – has reported like-for-like sales in the 13 weeks to 1 October 2023 were down 16.7% compared with the previous year due to the impact of “additional rail strikes and extremely warm weather throughout September”. Chief executive Sarah Willingham said the business “will not be in a position to reach its fullest trading potential until the industrial action has been settled”. Unaudited group revenue was £14.7m for the period, an increase of 42.7% on the £10.3m the previous year. The company stated: “Warm weather in September (which reduced the demand for socialising in basement bars) led to record weeks at our outdoor venues, Bar Elba and in particular Luna Springs, which had its strongest summer yet, as customers enjoyed our large outdoor spaces. While trading in October 2023 has continued on the same trend as the first quarter of FY2024, we are focusing on the important Christmas period. Christmas bookings and enquiries across the whole estate including Dirty Martini are in line with the strong 2022 Christmas period. The board remains cautious about the near term future trading due to the challenges presented by continuing train strikes. The Nightcap estate is of a higher quality, better operated and with better trained and more engaged teams than ever before. We therefore remain optimistic about the future potential of the group and remain excited about building the UK’s leading bar group. The group’s balance sheet remains strong. As at 1 October 2023, the group’s cash at bank was £2.6m with bank debt of £9.1m prior to entering the important and lucrative Christmas period. Due to the acquisition of Dirty Martini on 9 June 2023, only a few weeks prior to the beginning of the new financial year, we have been extremely busy, welcoming colleagues from the new sites, onboarding everyone into the Nightcap way of working. We have finalised the assignment of all the Dirty Martini leases except for one unprofitable Dirty Martini site at Hanover Square which, due to unreasonably high rent, had not operated profitably for a long time. This site was handed back on 13 October 2023. After positive discussion relating to the future of the Tuttons and Dirty Martini sites in Covent Garden, we have agreed a new lease of up to three years on more attractive commercial terms, which leaves Nightcap with a total of 46 bars.” It comes as the group reported revenue for the 52 weeks ending 2 July 2023 increased 29% to £46.4m (2022; £35.9m). Adjusted Ebitda on an IFRS 16 basis was up to £6.6m (2022: £6.0m). It made a pre-tax loss of £4.9m (2022: profit of £0.2m). Willingham said: “On the back of record breaking like-for-like growth in 2022 of 23.6%, we saw like-for-like revenue growth normalise in 2023 through a 12.5% decline. As a result overall like-for-like revenue remains ahead of 2019. The main driver of the reduction in like-for-like revenue growth for the year was by far the impact of the ongoing rail strikes. There were a total of 28 strike days in the financial year, mostly targeting holiday periods and pay day weekends to ensure they cause as much damage to the hospitality sector as possible. In total we estimate that £2.9m in revenue and £1.9m in company Ebitda (IAS 17) was lost during the strike days and so had the biggest impact on the like-for-like revenue growth during the year. We do not believe that Nightcap will be in a position to reach its fullest trading potential until the industrial action has been settled.” Chairman Gareth Edwards added: “I have no doubt that Sarah and the senior management team have all the skills and personal attributes to overcome the challenges ahead. Sarah, continues to build a strong, cohesive and focused team to power the business on to new and exciting prospects. I am very pleased with the group’s performance and expect the long-term growth to continue in establishing Nightcap as one of the leading bar businesses in the UK.”
Premium subscribers to receive updated Propel Multi-Site Database and Mark Wingett’s 2023 video picks tomorrow: Premium subscribers will receive the updated Propel Multi-Site Database tomorrow (Friday, 24 November). The Propel Multi-Site Database, which is produced in association with Virgate, has now grown to include 3,060 businesses that operate 71,189 sites. An additional 37 companies, which operate 246 sites between them, have been added. Premium subscribers also receive access to five other databases: the New Openings Database; the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; the UK Food and Beverage Franchisee Database; and the Who’s Who of UK Food and Beverage. Premium subscribers will also receive at 9am tomorrow, for the first time, the 12 best videos from Propel conferences in 2023. Selected by group editor Mark Wingett, they will feature a selection of talks and interviews that resonated with delegates from across the breadth of the hospitality sector. Premium subscribers are also to receive all the videos from this month’s Propel Multi-Club Conference on Friday, 1 December. They will be sent 12 videos at 9am. Premium subscribers receive all the videos from Propel conferences each year – around 100 in total. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Mark Wingett.
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